The objective of exploration is to find petroleum and increase the company's reserves. To accomplish this goal, the company must utilize its resources (i.e., money and personnel) in the most effective way possible. This might seem to indicate that, to accomplish this goal, exploration should be restricted to those areas in which the potential big fields (e.g., offshore) are being discovered. This is incorrect, however, because a company has limited resources and may not be able to obtain favorable leases in such areas. If this is the case, any effort spent on these areas will be a fruitless dissipation of resources. This does not mean that a company should not compete in these areas, but rather that it should learn how and where it can compete effectively.

Independents do not face this problem because their resources are so limited they cannot have illusions about how and where to compete. Very large companies can overcome this difficulty by overbidding on areas of interest, thus insuring that they can obtain their goals. It is the companies which fall between these extremes which face the problems of how and where to compete.

In attempting to compete, most companies use the trial-and-error method and in the process dissipate resources which they cannot afford to expend. Another alternative is to use the computer. Algorithms have been developed to simulate decision making in conditions of uncertainty; some have been done concerning exploration and lease bidding. By use of this type of approach and adapting the OR method to the problems of exploration, a company can find how and where best to invest its resources.

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